THE PRESIDENT of the High Court wants to hear from the State’s Insurance Compensation Fund before considering an application to allow the Quinn Insurance group draw €600 million from that fund.
Mr Justice Nicholas Kearns also said yesterday he wanted an independent review of fees sought by merchant bankers Macquarie Capital Europe for their handling of the proposed sale of Quinn Insurance to a joint venture involving Anglo Irish Bank and US insurance giant, Liberty Mutual.
The judge made the comments after the insurer’s joint administrators, Michael McAteer and Paul McCann of Grant Thornton, presented him with their seventh interim report yesterday.
Bernard Dunleavy, for the joint administrators, confirmed the total estimated call by Quinn Insurance on the Insurance Compensation Fund will be €600 million. Subject to approval from the court, it will seek €180 million from the fund later this year.
Counsel said the administrators wanted to make it clear they never told the court at any stage during the administration period they would not call on the compensation fund.
The fund was set up by the Government in the wake of the collapse of the PMPA insurance firm to protect policyholders if insurers could not meet their liabilities.
The proposed sale of Quinn to the Anglo Liberty Mutual venture represented “the best deal”, counsel said.
It was the “only deal where all the jobs would be saved” and also involved the least amount being drawn down from the fund.
The involvement of Macquarie in the sales process was important in making sure the exposure of the fund was minimised, he added.
The court heard Quinn Insurance lost €709 million in 2009, comprising an operating loss of €559 million and investment loss of €147 million. The draft financial reports for 2010 indicate a loss of €160 million.
Counsel said that the administrators were confident losses at the company had been stemmed and the new policies which commenced after their appointment were profitable.
The company had made a pre-tax profit of €14 million in the first three months of 2011, he said.
As part of the sale process for the insurer, Mr Dunleavy said the High Court would be asked to approve the drawdown of funds from the compensation fund and to approve transfer of Quinn’s insurance portfolio transfer to Anglo/Liberty Mutual.
Mr Justice Kearns said he wanted to hear from representatives of the Insurance Compensation Fund before approving any drawdown.
While the fund representatives may not wish to come before the court, it was important they be given the opportunity to do so, he said.
He adjourned the case for a week, to allow the administrators come up with a format as to how the review of the fees charged can be conducted.
